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JPMorgan’s Kelsey Berro says bond market can handle high-grade supply
Record investment-grade issuance isn't spooking buyers, and that tells you something about where fixed-income demand really stands
The investment-grade corporate bond market is having one of its busiest stretches in recent memory, and according to one of JPMorgan’s fixed-income managers, that’s not really a problem. Kelsey Berro, a portfolio manager at JPMorgan Asset Management, argues that demand for corporate debt is strong enough to absorb the wave of new paper without meaningful disruption.
The supply picture
September 2025 was one of the most active months for US investment-grade corporate bond issuance on record, with volumes landing in the range of $172 billion to $226 billion, driven by a cocktail of AI infrastructure spending, corporate refinancing, and merger-related financing.
Looking further out, the pipeline doesn’t slow down. JPMorgan projects that investment-grade supply could reach between $1.8 trillion and $2.1 trillion in 2026.
As of mid-2026, US investment-grade option-adjusted spreads sat around 78 basis points, near historical lows. That’s the premium investors demand over government bonds to hold corporate debt, and it’s remarkably tight given the issuance volume.
Why buyers keep showing up
Berro’s thesis rests on a straightforward observation: yields are attractive enough to keep drawing in capital. Average high-grade yields for investment-grade corporate bonds stood at approximately 4.8% in mid-2026, with the broader range spanning from 4.8% to 6% depending on maturity and credit quality.
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The demand dynamic also reflects something structural. Pension funds, insurance companies, and other liability-driven investors have a natural appetite for high-quality, predictable cash flows. When yields rise to levels that actually help these institutions meet their obligations, their buying becomes less discretionary and more mechanical.
What the tight spreads signal
Spreads hovering around 74 to 82 basis points over the past few years tell a specific story about market confidence. When spreads are this narrow, it means investors aren’t demanding much extra compensation for credit risk.
The AI infrastructure boom is playing a meaningful role on the supply side. Companies building out data centers, chip fabrication facilities, and cloud computing capacity need enormous amounts of capital, and the investment-grade bond market has become a primary funding source.
The risk, of course, is that something changes the demand picture. At 78 basis points, there isn’t much cushion built into prices if sentiment shifts. But for now, the market is voting with its wallet, and the verdict is that supply isn’t the problem everyone feared.